Covid-19 lock-down business news update 17 July 2020.
17 July 2020.
James Salmon, Operations Director.
The Bank of England has issued a bad debt warning, payrolls shrink, self employed warned over misusing support schemes, pub sales down dramatically, covid-19, tax, markets and a lot more news.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
Bad debt warning
The Bank of England (BOE) has issued a bad debt warning. A BoE survey suggests demand for loans is set to increase at a time when banks start to slow down lending and prepare for a wave of bad debts.
Lenders told the BoE’s Credit Conditions Survey the availability of mortgages and unsecured debt is likely to decrease in the coming weeks, with concerns over borrowers’ ability to repay.
The poll saw banks and building societies flag worries over customers who have opted for payment freezes on mortgages, credit cards and other loans, with lenders seemingly concerned that customers will have to restart payments in a period when jobs are increasingly at risk as the furlough scheme stars to wind down.
The bad debt warning will be worrying to any business selling on credit.
Payrolls shrink by 649k jobs in lockdown
Official figures indicate that the number of workers on UK company payrolls fell by 649,000 between March and June.
The overall jobless rate was unchanged but there are 47,000 more young people unemployed than there were a year ago. Unemployment has not surged amid the COVID-19 crisis because large numbers of firms have put employees on the government-backed furlough scheme.
Yael Selfin, chief economist at KPMG, said Government measures had shielded the labour market from the “worst of the immediate crisis … but as the job retention scheme unwinds in coming months, the full impact of the recession on unemployment is likely to be revealed.”
The Office for National Statistics (ONS) said that since the start of the pandemic total weekly hours worked in the UK had fallen by a record 175.3m, or 16.7%, to 877.1m hours.
Job vacancies fell to 333,000 between April and June – almost two-thirds lower than in the same period last year and the lowest level since the ONS began collecting comparable data in 2001.
Self-employed warned over support cash
HMRC guidance has warned self-employed workers they could face prosecution if they have incorrectly or illegally claimed payments from the Government’s coronavirus financial support scheme.
The Revenue says it will not seek to punish “innocent error or small mistakes”, but will come down hard on cases of “deliberate non-compliance”.
Fiona Fernie at Blick Rothenberg said: “HMRC has issued guidance to the self-employed that if they have been ‘overpaid’, or claimed a grant in error, or were not eligible for the grant in the first place they should pay the money back immediately.”
Loan deferral call
Banking lobby group The City UK says recapitalisation of government-guaranteed loans is “essential” to protect small businesses, warning that if repayments cannot be deferred, up to 3m jobs and 750,000 SMEs will be at risk. It called for the creation of a student loans-style scheme, where businesses could convert loans into means-tested tax liabilities.
Pub sales down 40%
Pubs and restaurants that have reopened as lockdown measures were eased have yet to see a surge in sales.
Pubs open in the week beginning July 6 posted a 39% decline in sales compared with the same period last year, while bars were down 43% and restaurants declined 40%, a tracker from RSM, consultancy firm CGA and The Coffer Group shows.
Considering the sales figures, CGA director Karl Chessell said: “Trading at almost 60% of pre-coronavirus norms is actually a better performance than many other markets internationally.” The analysis also shows that 70% of pubs or pub restaurants surveyed had reopened their doors, compared with 42% of bars and 17% of restaurants.
MPs to conduct tax inquiry
A Treasury Select Committee inquiry is set to examine taxation in Britain, looking into the long-term pressures on the tax system, how the UK can protect its tax base from globalisation and technological change and whether tax reforms are needed. Committee chair Mel Stride commented: “Tax will play a major role in restoring the public finances and ensuring a recovery which is balanced across the UK and fair to all.”
Opinion: Tax system needs ‘innovative verve’
With the Chancellor ordering the Office of Tax Simplification to conduct a review into capital gains tax, Ed Conway in the Times considers the tax system. He suggests a number of taxes should be abolished and replaced with a progressive consumption tax, arguing that policymakers are “taxing the wrong stuff”. Noting that 55% of tax revenues collected by HMRC over the past five years came from income tax and national insurance, while corporation tax accounted for a further 9%, Mr Conway questions taxes on earnings, suggesting taxing what people spend may offer a simpler option. Pointing to support measures the Treasury rolled out amid the coronavirus crisis, he calls for “some of that innovative verve” to be applied to the tax system.
Millionaire in tax-the-rich call
Former trader Gary Stevenson, one of 83 millionaires who has signed an open letter calling on governments to raise taxes on the wealthy, says a greater tax for such people “will be the only way to provide support to struggling people in a time of desperate need”. Writing in the Express he says an increased levy should target “a class of people who pay considerably lower tax rates”, namely “the super-rich … who accumulate wealth through capital gains and trusts, building up huge piles of millions and billions that will never be taxed, and never be spent.”
Pizza Express mulls CVA
Pizza Express is to close up to 75 of its restaurants as part of a rescue plan. The restaurant chain is reportedly lining up a CVA, while investment firm Hony Capital may lose control of Pizza Express to bondholders under a debt-for-equity swap. Meanwhile, Azzurri, which owns the Ask Italian and Zizzi restaurant chains, is in advanced talks over a sale to Towerbrook Capital Partners via a pre-pack administration.
Covid-19 general news
Global cases surpassed 13.8M yesterday with 590,000 deaths.
India hit the 1 million cases milestone. Brazil passed 2 million.
Russian hackers are reported to have tried to gain access to American, British and Canadian vaccine research, according to intelligence agencies. APT29, a hacking group also called Cozy Bear, which is reportedly linked to the Russian state, has been attempting to steal information, they said, though vaccine programs have not been hampered. The Russian government have denied responsibility.
Prime Minister Boris Johnson is set to give local councils the capacity to implement “lightning lockdowns” without first notifying the government when he gives a major speech today. The PM is also set to announce more than £3bn extra funding for the NHS to ensure it can cope with a second peal of coronavirus cases in the winter.
The 27 leaders of the European Union are to assemble in Brussels today for the first time in months as they try for the second time to strike a deal on a colossal EUR750 billion shared economic recovery plan. Last week, European Council President Charles Michel proposed a EUR500 billion share of loans to EUR250 billion share of grants.
Markets.
The FTSE 100 London dropped 0.5% yesterday with the European Central Bank’s policy of ‘wait and see’ unable to offset worrying Chinese retail sales and UK jobs data. In Europe, indices also declined with France and Germany both slipping 0.5% as well. There was some optimism in Asia though as Chinese reported GDP growth came in at 3.2% year on year. The Chinese stock market tried to stage a rally but lost momentum and the rest of Asia was mixed. The pound continues to weaken at 1.254 USD and 1.100 Euros. US markets fell a third of a percent as Netflix slid after reporting 10 million subscribers in the last quarter but then predicted ‘only’ 2.5 million this quarter.
Apple’s victory raises questions over EU’s digital tax
Experts have warned that Apple’s successful appeal against a €13.1bn fine from the European Commission (EC) may deliver a blow to the EU’s digital tax strategy. Laurence Field, corporate tax partner at Crowe, said the case was “seen as key in trying to stop tax competition between member states, which the EU frowns upon and member states get away with what they can.” Jason Collins, head of tax at Pinsent Masons, says Apple’s victory “shows that European courts are unwilling to call beneficial tax regimes state aid, even when designed to attract foreign investment – provided they apply the rules consistently”. Meanwhile, the EC has announced fresh plans to clamp down on tax regimes seen as unduly beneficial to big corporations. It plans to expand its 1997 tax code of conduct to tackle member states’ corporate tax regimes that have broadly harmful effects. Elsewhere, a report from Moody’s warns that the impact of a Europe-wide digital tax would be “limited”, given smaller companies would likely be harder hit than the large ones it is aimed at.
Bad debt warning
The Bank of England (BOE) has issued a bad debt warning. A BoE survey suggests demand for loans is set to increase at a time when banks start to slow down lending and prepare for a wave of bad debts.
Lenders told the BoE’s Credit Conditions Survey the availability of mortgages and unsecured debt is likely to decrease in the coming weeks, with concerns over borrowers’ ability to repay.
The poll saw banks and building societies flag worries over customers who have opted for payment freezes on mortgages, credit cards and other loans, with lenders seemingly concerned that customers will have to restart payments in a period when jobs are increasingly at risk as the furlough scheme stars to wind down.
The bad debt warning will be worrying to any business selling on credit.
Don’t let Covid-19 bust your business!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?
Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections